Aircraft Maintenance Choices: Getting them Right…

When buying a business aircraft, one of the most important things to consider is how it will be maintained. Having a clear vision will help ensure that all the owner’s expectations are met, and that the required destinations are reached safely, and when planned.

One of my greatest challenges is to explain the processes of maintenance and airworthiness to the aircraft’s owner. Owners, who in most cases don’t involve themselves in the intricate day-to-day running of the flight department, understandably expect their airplanes to be like cars: they just need fuel, a ‘driver’, and an occasional oil change.

Helping them comprehend the airworthiness processes and the airplane’s specific maintenance schedules, based on calendar months and hours flown, is no easy task. This can be further muddled when an unexpected Airworthiness Directive grounds, or restricts the aircraft’s operational ability.

Juggling all of these, it remains essential to meet an owner’s expectation even if supplemental lift is needed to cover for a maintenance event.

Learning that an aircraft has calendar-due items AFTER it is grounded for an inspection can be puzzling for owners, and it takes an experienced aviation manager to combine and organize due items into cohesive, scheduled tasks that prevent a never-ending cycle of smaller, recurring inspections that disrupt the aircraft’s availability and add cost to the balance sheet.

Developing a Maintenance Plan

For the first five years of new aircraft ownership, one can expect the warranty to cover most parts and unscheduled labor. With the added protection of an hourly engine and/or APU maintenance program, maintenance costs should be predictable, depending on how comprehensive the coverage is.

Those five years provide the opportunity to understand the aircraft’s maintenance cycles, developing a post-warranty plan that falls within two major groups: ‘Pay-As-You-Go’, or ‘Pre-Paid’.

Pay-as-you-Go: A benefit of ‘pay [for maintenance]-as-you-go’ is that your operational capital is only used when it’s needed. In a perfect scenario, the aircraft has relatively few squawks, no major component failures or powerplant issues, and the savings are significant. But this is a gamble and there are potentially expensive risks involved.

Here, the owner assumes full responsibility for maintenance costs, and needs to have ready cash available to pay for major expenses that can be entirely unforeseen. Considering that a generator installed on a large cabin aircraft may cost $250,000, your bank account needs to have plenty of cushioning for the unusual temperament of a private aircraft.

An engine issue, such as Foreign Object Damage (FOD) could cost well over $1m to rectify - these are significant risks that don’t even factor the costs of supplemental lift or loaner engines, or shipping costs of parts.

This approach, in my opinion, is suited to companies with significant aircraft operating experience, equally impressive cash, large aircraft fleets, and in-house maintenance programs.

Pre-Paid Maintenance: For those who don’t care for such risk, there are variations to the pre-paid approach to maintenance – hourly maintenance programs – into which, you pay an agreed amount of money for every hour you fly. It is here that you’ll find most professionals choose to ‘park their dollars’.

Most will select engine and APU coverage since these are the high dollar expenses. Engine programs will likely include access to a ‘loaner’ pool should yours require rework or repair, ensuring that while the engine, at least, is grounded, the airframe isn’t. And with enrolment on such a program, the residual value and marketability of your aircraft will generally be greater.

What follows after is a smorgasbord of options. Engine OEMs, for example, provide maintenance programs, and so do third-party providers. What are the benefits of each?

Then, some programs provide single-level, comprehensive coverage, while others provide multi-level coverage at different price points. Make sure you know what each does and doesn’t include – cheaper levels of coverage could leave operators exposed to unexpected surprises (for example, shipping costs of parts may not be included).

And then there are providers who offer coverage for multiple areas – from whole airframes to just the avionics.

Regardless of the coverage levels or items you select for coverage, the program provider should have the extensive network and proven track-record to supply your maintenance and parts requirements. When an aircraft is AOG, for example, you need your provider to reach in to its network and source whatever parts and expertise are needed to get you back in the air wherever you are in the world, with minimal delay.

An MRO Piggy Bank

I, for one, opted for something comprehensive. After our aircraft exited its five year warranty, I selected a program including parts, scheduled and unscheduled labor, and pre-payment of our ten year inspection and landing gear overhaul.

Since our budget assumes 300 hours of flying annually, we formulated this assumption into a pre-set monthly rate which is billed irrespective of whether we fly 300 hours or not. This ultimately forms a maintenance ‘piggy bank’ that, at the end of our contract, may generate a refund of unused funds, less a management fee.

My annual budget is nearly exact with these solid maintenance numbers behind it. And since we have our own director of maintenance, small inspections and squawks are resolved in-house and billed back to the provider to be added as credits at the end-of the contract.

In Summary…

Whatever you choose, don’t approach aircraft maintenance with the hope that issues can be resolved as they happen. Especially in today’s world of heavy MRO shop schedules, supply chain issues, and high charter demand, you’ll end up being the one paying a premium, while searching for labor and elusive parts in order to make the next trip happen.

Having a solid maintenance plan is critical to successfully dispatching your aircraft in a way that delivers a great ownership experience. A well-structured program will be key to delivering quality and keeping your managed aircraft safe and airworthy.